China's central bank makes cryptocurrencies one of its top priorities, in an effort to protect its national currency.

The Chinese government has continued its crackdown on cryptocurrencies. The latest pledge for action comes from the country’s Central Bank Deputy Governor Fan Yifei. He has outlined the government’s conviction to continue its efforts on stopping the use of cryptocurrencies in China in a recent speech.

Fan voiced the intentions of the Chinese Central Bank to stop the use and the distribution of digital currencies in the country. The effort is part of the new regulatory role of the institution which was announced in the aftermath of the latest Chinese communist party congress.

Prices drop back below $7,000

The announcement was made earlier this week during a teleconference dedicated to currency, gold, and silver. The news dashed to pieces the hopes of local cryptocurrency enthusiasts that the new head of the Central Bank is friendly towards cryptocurrencies. Friendly he is, but his main mission is to cater to the interests of the Chinese central government.

In September 2017, Chinese authorities committed to banning ICOs as the first major step to reign in the growing popularity of digital alternatives to fiat money.

PBOC developing digital coin

As we all well know, the Chinese government is not tolerating competition very well. Not only have the country’s authorities limited access and the sale of digital currencies, they also have a history of Western companies coming to China to do business.

Suggested articles

Earlier this month, the appointment of Yi Gang as the new PBOC governor brought a serious decline in cryptos to a halt. As his intentions become more pronounced we observe that his positive attitude towards digital currencies is somewhat different from what the market expected.

The PBOC itself is on a trajectory to launch its own version of a digital currency, Deputy Governor Fan shared. The central bank has been investing in research and development of blockchain technologies.

The potential for unlimited traceability and the ease of distribution and access to digital currencies, provided that one serves as legal tender, has the potential to greatly facilitate a transition to a new economic model.

PBOC focusing on the real economy

The measures which the Chinese government is taking are designed to curb speculation and commit further efforts to the development of the real economy. The People’s Bank of China is amongst the first regulators in the world to take a tough line on cryptocurrencies and at the same time commit to the potential of blockchain technologies.

In a statement issued on the website of the Chinese Central Bank, it stated that it is aiming to facilitate cash transactions and step up reform and innovation. The PBOC is referring to its efforts to carry forward the central bank’s research and development of a digital currency.

The main reason for the project is to ensure order in the circulation of the Chinese currency, the renminbi. The Central Bank stated that it will tighten supervision as well as strengthen quality management and control to reign in prospective competition from other digital currencies.